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Santosh Plastics inci purchased a new machine one year ago at a cost of $84,000. Although the machine operates well and has five more years of operating life, the president of Santosh Plastics is wondering if the company should replace it with a new electronic machine that has just come on the market. The new machine costs $126,000 and is expected to slash the current annual operating costs of $58,800 by two-thirds. The new machine is expected to last for five years, with zero salvage value at the end of five years. The current machine can be sold for $14.000 if the company decides to buy the new machine. The company uses straight-line depreciation. In trying to decide whether to purchase the new machine, the president has prepared the following analysis: "Even though the new machine looks good," said the president, "we can't get rid of that old machine if it means taking a huge loss on it. We'll have to use the old machine for at least a few more years" Sales are expected to be $294,000 per year, and selling and administrative expenses are expected to be $176,400 per yeat, regardiess of which machine is used. Required: 1. Prepare a comparative income statement covering the next five years, assuming: o. The new machine is not purchased b. The new machine is purchased